Sodexo cuts targets after weak performance in second quarter
Sodexo had identified areas of underperformance and would implement a series of measures to improve matters.
French food services and facilities management group Sodexo cut its full-year sales and profit margin outlook after its second-quarter performance came below expectations.
Sodexo, which is the world's second-biggest catering services company after Britain's CompassGroup, had identified areas of underperformance and would implement a series of measures to improve matters, the company added.
"We have identified specific areas of underperformance and are acting quickly to implement a series of corrective measures," said new chief executive officer Denis Machuel in a statement.
"As we combine the unique strengths of Sodexo, its offers and the quality of its teams, with greater discipline and accountability across the Group, I am confident we will deliver strong growth over the medium term," he added.
Sodexo said it now expected to deliver organic revenue growth of between 1-1.5 percent for the 2018 fiscal year, and an underlying profit margin of around 5.7 percent.
In January, Sodexo had forecast revenue growth of between 2-4 percent and a flat operating margin at 6.5 percent of sales for the full year ending August 31, 2018, excluding the impact of acquisitions and currency exchange movements.
Sodexo manages canteens and facilities for office workers, armed forces, schools, hospitals and prisons, and also supplies vouchers for meals and gifts. Its clients range from the Royal Ascot Racecourse in England to the US Marine Corps.
For the first-half ended Feb. 28, organic revenue growth was 1.7 percent and the underlying operating margin was 6.1 percent, with both coming below expectations, the company said.
Sodexo's previous veteran Chief Executive Michel Landel retired at the annual shareholders meeting on January 23. He was replaced by digital boss Denis Machuel, who had worked as deputy CEO since September 2017 alongside Landel.
In January, Sodexo said its first quarter performance, which had lagged expectations, was impacted by weakness at its food service business in north American schools and universities and by tough economic conditions in Brazil, which had weighed on the vouchers division.
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